Q It has been assumed that my younger brother will take over the family business. No one has asked me what I think. Actually I have always had my sights set on becoming the next leader in the business. How do I go about letting everyone know how I feel?
A Hi Jane, my suggestion would be for you to organise a meeting with your parents and brother to talk about the future as you think they are planning this already. You can then say that you are very interested in the role of the next leader of the family business. This will then signal that you need to be considered on a level playing field with your brother. Go prepared to listen, empathise with the situation and a list of things that need to be tackled in order for the transition in the future to be addressed.
Q My son has a degree in engineering and an MBA. He has been working hard and had success in his department of our marine engineering business, but my Board don’t all agree that he has the leadership skills to steer the ship so to speak. I’d really like him to play a senior role and to eventually take over from me. I want to do the right thing by my son and also the Board. What’s the best way to tackle this?
A Be honest and speak to your Board about your aspirations for your son. You are a family business after all. However, to ensure he understands this has nothing to do with entitlement, work with your board and your son to write a leadership development plan with critical pathways. It’s important to get buy in from your Board whilst at the same time on the understanding he will earn his place.
Q None of my children have expressed any interest in taking over our family business, what are my options?
A In the first instance, I would suggest that you may ‘think’ you know they are not interested, but they may very well open up to an independent party who they trust and enable them to say exactly why they have given you that impression. It is rare that children are able to speak the truth for fear of reprisals. If you are correct in your assumption, then this could be a fantastic opportunity to include them in your next step plans and that all benefit.
In which case there are many options available to you:
- trade sale
- become employee owned
- management buy in or buy out
- appoint a non-family management team, incentivised, to run the business with you remaining as a shareholder and non-executive director
- merge with a business that would make a good fit and take a minor shareholding
- search for a private equity partner to grow the business with an earn out in place for yourself and small shareholding
These are just some options. You would be wise to investigate and play ‘what if’ scenarios. With every decision there will be a knock on effect with all members of the family. The trick is to go for a win win with the family members in order to protect the relationships.
Q I love my son to bits, but honestly, he just isn’t up to the job. I know he is keen to lead the business. I don’t know how to tell him for fear of hurting his feelings and damaging our relationship for good.
A This is one of the hardest decisions you will ever have to make Anne. You are right to approach it with caution and sensitivity. I would sit down and have an honest conversation about the future of the business and talk about your options. ie next generation –Bernard v selling and other exit options. If you are adamant he is unsuitable then you have to tell him. But ask about his aspirations other than the business. You may find you will be able to help him begin his own enterprise with start up capital from you as a result of a sale or transfer to another form of business model.
Q I feel I’ve inherited a poisoned challace. There simply isn’t enough money in the business to continue to fund my parents’ lifestyles. I hadn’t realized this when I stepped up to MD. In my view any profits need to go straight into the business in order for us to come out of this dip in tact. How do I have that conversation? My parents are not so old only in their early 60s?
A It sounds as if some open, honest conversation needs to take place here Ian. Think about your approach seriously. As MD you are in the hot seat and should be able to make decisions for the business with your operational hat on. At the same time your parents started the business with their blood sweat and tears. Using a third party may be a good idea to help formulate an agenda that allows everyone’s voice to be heard. You may find a good solution would be to buy the business outright at the going market rate. This would enable your parents to extract their value out of the business and give you complete autonomy to be at the helm. Find out what they want and design a plan that works for all. It will be a compromise, and take a lot of mental strength. Try to see the challenge from both parties. Key to a successful outcome will be; communication, clarity, honesty, openness, appreciation, humility and kindness.
Q I find it difficult to balance my work responsibilities with that of my family. I’m under a lot of pressure from my father as my CEO and my wife. Sometimes I feel I’m between a rock and a hard place. Help?
A You have every right to integrate work with family life. This is how things should be. Finding a balance is difficult, but allows your dad and your wife to come to an understanding. The business comes first of course, but not at the sacrifice of family. There will be a way. Talk to others in your position and see how they have managed the challenge. Don’t forget that in the long run, your decision will have a deep impact on your children too. Business responsibility and family cohesion both need tlc. You are not alone, but if you can crack it how great would that be for all concerned? Find ways to make it work by each of you being honest about your agendas and aspirations.
Q My coach says I need to leave the business and work somewhere else free from the grip of my parents. I don’t know if that would be a good move. I’ve a feeling my parents would be devastated, but I need to spread my wings and see what goes on in the real world. Any ideas on this one?
A Follow your instincts. It’s your life. But find a way to speak to your parents in a non confrontational way and help them to understand. There is absolutely no merit in letting them think otherwise. Likewise, you may very well want to come back into the business a few years down the line. It would help to express honestly what you want out of life. And to understand what they had hoped for. Together you can make plans that will suit both. Be brave, be bold, be right.
Q We had a difficult time persuading our dad to step back from the business. Eventually he did, but still pops in from time to time. A bit meddling, but we’ve decided to quietly professionalise the business and find dad special projects to do. Our biggest challenge is understanding what we both want out of the business and what we are prepared to put into it. I’m married, so family life is important. I want to spend time with my kids unlike it was when I was a kid. My brother on the other hand has been working in the business for at least 10 years before me and is a workaholic. It’s causing a bit of tension. I’d like to sort this out as we are now joint MDs. What advice can you give me?
A It sounds as if your dad is unable to step back from the business completely. Not surprisingly. This happens a lot in family business where the word ‘retirement’ doesn’t exist. There does need to be some straight talking and you may find a third party you can trust, useful in opening up the conversation, so everyone can have their say without fear of upsetting each other. Better out than in as they say. This calls for tact, empathy and being able to see the big picture.
Regarding the different aspirations between you and your brother. This can be resolved upon the basis that each of you will need to agree to make some compromises. The fluent running, objectives and success of the business depends on how well it is managed. Your leadership is paramount. The starting point is to set aside time and a neutral place away from the business where you can discuss things without interruption. If you can put together an agenda between yourselves, then all well and good. You will need to be honest with each other and put yourselves in each others shoes. Find ways to make the relationship work. If you feel you can’t do this between you and concerned that emotions will run high, then you would be best placed to seek an independent advisor who has the skills to mediate and guide you.
Q We are a fourth generation business. I want to step back from the business altogether having spent my entire life working firstly alongside my father and then as CEO and now Chairman. However, not all of my children work in the business. In fact my eldest son does and my other two boys work elsewhere. I’ve made sure that dividends are paid out equally amongst the three families, but at the moment with what’s going on in the economy I’m feeling the tension when we get feedback from the Board. I sense the boys don’t trust their eldest brother to run the business without outside help. This means I can’t step back and leave the business altogether. And I won’t until the boys agree how to support each other and work it out. How would you tackle this huge problem?
A This is a complex and very challenging situation. It has already proved to be difficult with emotions running high. Trust is key in this, together with honesty and open conversations that can be controlled without things getting out of hand. My advice would be for the family to work together as a team, to each have their say, to look at the future possibilities and to decide on key roles and responsibilities. Working towards a family constitution will enable all scenarios to be worked through including: purpose, values, asset management, roles and responsibilities of family members and much more. Each family will have their own agenda. The journey towards a family constitution is hard work, challenging and at times exasperating. It takes true grit and a willingness to listen and empathise for it to be successful. Once agreement is in place on all topics , this can be written down and used as a point of reference. Things won’t happen overnight, but if successful you will feel the benefit, have confidence and bring harmony to your family going forward.
Q My middle daughter used to work with me as my PA. She was great in the beginning, but after a couple of years, she is now showing signs that she is bored. It’s being noticed by the rest of my team. I think it is time for her move on and out of the business, but I’m not sure how to deal with the situation without upsetting her. How can I do this and protect our mother daughter relationship?
A The way you handle this situation must be with care. Entitlement is not a passport to being in the business. Each member needs to prove his or her worth for the sake of the family, employees, customers, suppliers and the business. You can be forthright but with kindness. Have ideas on alternative career paths and assure your daughter you will support her all the way. If you can talk together so she feels supported and encouraged to find her purpose, this will be a good starting point in protecting your relationship.
Q I’m second generation in our family business and I’m in my 70’s looking to exit. I’d like my son to take over the firm, but we haven’t spoken for the last three years after a quarrel he and his family left the UK and live over the other side of the world. It breaks my heart to think I may have to sell the business. Even our daughter has up sticks to join him.
A I really feel your pain Paul. Take heart, there could be a solution to your situation so long as all members of the family are willing to take part. Your family is the most important thing in your life. Nothing is worth letting this unravel tragically. My advice would be to seek out an independent mediator to open up the lines of communication. Listen to each person and collect confidential information that helps to understand the series of events that caused such a tragic rift between you. You will all need to be prepared to bring your truth to the table and find a way to resolve things. It can be done, but egos, resentments and past issues need to be left at the door in order to begin meaningful discussions.
Q Our family business is now in its 4th generation. We own property that is co-owned by me, my sister, and two cousins who live in Canada and Australia. Managing the property by letting it out to a variety of creative businesses provides the sole income for my sister. I’m a nurse. We are not sure, she is still fit and astute enough to do the job, as we are losing money. What are our options and how can we manage expectations of the whole family?
A Take this scenario and apply it to a non family business, where company purpose, objectives, business strategy, roles and responsibilities are paramount in order to build a successful business. Take the emotion out of the ring and look at the business in the cold light of day. You are managing a property that will benefit all the shareholders. You may find it useful to connect with another similar business that has resolved their issues and give you pointers of what worked and what won’t work in the discussions and negotiations. You have a complex challenge with disparate locations and share holders. With every step, keep each other in the loop and write things down. Find a compromise that you can all agree and work towards a solution.
Q I work with my mum and sister, dad and husband in the family business. It’s exciting that I’m now a mum, but I really don’t want to rush back to work. I’m feeling guilty, but love being with my baby. To be honest I think I’m suffering from post natal depression and feel teary a lot of the time. Going back to work even part time is really really difficult. How can I tell my family I don’t want to leave my baby with a child minder? I feel torn.
A Be brave and voice your worries with your family. You will be surprised how supportive they will be. A grandchild in the family is a wonderful thing and the business will be flexible enough for you to take the time you need in this first year with your new family member. Nothing is worth feeling anxious or guilty about. This is real life and you will never have this precious time with your baby again. Do what your heart is telling you. The world won’t stop turning just because you want to be the best mum you can be. Listen to your body and mind in order to deal with your depression. Everyone will want to support you. Be honest and do the right thing for you, your baby and family unit. The business can wait.